Union Jack Oil PLC (AIM:UJO, OTCQB:UJOGF) shares were in favour on Monday after the company’s Wressle field, in Lincolnshire, onshore UK, secured planning permission in order to expand operations.
It will allow production to be enhanced, by new wells, and also allows gas to be handled, and commercialised.
The news was welcomed by analysts at Shore Capital, house broker, which in a note highlighted this latest milestone for the project that’s been already proved a commercial success in recent years.
“Not only does connecting the associated gas to the local distribution network allow Union Jack and its partners to monetise the gas, but it also allows them to minimise flaring and increase oil production at Wressle,” the broker said.
“We expect the partners to provide an update on the timing of development activity in the coming weeks, with Union Jack scheduled to release H1 FY24 results in late September.”
The planning permission will allow the drilling of two new wells along with the construction of gas processing facilities and the installation of an underground pipeline to connect the site to the local gas distribution network.
"I am delighted that the joint venture partnership has received the planning consent to continue development of Wressle, which will increase oil production and monetise the associated gas from the field, resulting in zero routine flaring at site,” said executive chair David Bramhill.
"This positive decision represents to Union Jack a significant domestic production growth opportunity at our robust and reliable flagship Wressle project and for the UK provides economic and environmental benefits compared to imports on which the UK is becoming increasingly reliant.
"I look forward to updating the market further as the Wressle partners progress the field development."
The Wressle field is located within licences PEDL180 and PEDL182, on the western margin of the Humber Basin in North Lincolnshire.
Union Jack Oil holds a 40% interest in the project alongside partners Egdon Resources (30%) and Europa (30%).